National Audit Office report says some of department’s data collection is ‘time consuming and resource intensive’

HM Revenue and Customs (HMRC) should look towards developingmore automated and cost-effective ways of collecting data about itsbusiness, according to a National Audit Office (NAO) review into thedepartment’s “indicators” and operational data systems.

The review, carried out over five months to February 2012, found thatsome manual data collection is time consuming and resource intensive.There is a risk that with continuing headcount reductions, it may bedifficult to maintain its current systems.

It gives the example of the length of time needed to deal with data aboutpostal enquiries, which is collected manually by examining a sample ofpost received.

“An automated logging system could be a more cost-effective way ofmeasuring the length of time taken to deal with post,” the documentsays.

“[HMRC] should also consider whether it is necessary to collect all thedata it currently collects… or whether it would be more cost-effective tofocus on a reduced number of key measures, such as those which aremost business-critical or liable to fluctuations in performance.”

According to the NAO, there are some areas where performanceinformation could be improved to give better insight into how thedepartment is performing in “priority areas” and making progress with thechallenges it faces.

In particular, HMRC aims to improve efficiency, but its publishedindicators measuring the unit costs of tax collection and benefitsadministration are not affected by efficiency alone, the report says. Theunit cost indicators are affected by other factors, such as tax rates andeconomic conditions, which may make comparisons over time misleading.